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Mr. Lewis: As far as I am aware, that is the case. Clearly, if I am told differently after the debate, I will write to my hon. Friend. However, that is my view, based on the information that I received in the run-up to the debate.

Let me deal now with the marine protected area. When the Foreign Secretary launched the public consultation on it in November last year, he pointed to what he described as a

Potentially, this is a very significant project, with wide ramifications.

We extended the consultation period because, as hon. Members said, we needed to consult as widely as possible, and the consultation concluded only last Friday. The all-party group has formally responded, as has my hon. Friend the Member for Islington, North. In addition to taking written contributions, we made sure that an independent facilitator was made specifically available to speak directly to Chagossians in Crawley and the Seychelles and by video teleconference to those in Mauritius.

I am not being coy when I say that the consultation genuinely closed last Friday, and we are not in a position at this stage to announce its outcome or how we intend to proceed. However, I would like to place on record that it is important that hon. Members are briefed-I suspect that this may be the responsibility of someone else, who will, I hope, come from the Labour party-when the Government decide what to do next about the marine protected area. I am cognisant of the fact that hon. Members feel that there was not sufficient consultation with parliamentarians on the Chagossians in the past before apparently unilateral decisions were made. I therefore put on record a commitment to make sure, wherever possible, that interested hon. Members are briefed before we make final decisions on the marine protected area.

Let me turn briefly to the specific point that the hon. Member for East Dunbartonshire (Jo Swinson) made about extraordinary rendition. Other hon. Members, including the hon. Member for Mid-Norfolk (Mr. Simpson), made the same point. We are all aware of what happened in 2008, but the key point is whether any assurances have been given that it will not happen again. It is important to put on record that in February 2008, when the issue came into the public domain and the Foreign Secretary made his statement to the House, the then US Secretary of State, Condoleezza Rice, publicly underlined the firm US understanding that there will be no rendition through the UK, our overseas territories and Crown dependencies or our airspace without our express permission having first been received. Hon. Members may say that that was our understanding in the first place, but it is important that we have on record a reiteration of the fact that the US understands that these things were not acceptable and should never happen again. In terms of our special relationship with the United States, we are not happy with the way it has behaved historically on this issue, but we have to accept in good faith the assurance that the then Secretary of State gave.

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Jo Swinson: That was really my question. Is this just a matter of accepting the word of the US Secretary of State in good faith, or is there anything else that the Government can do so that they have confidence that these things are not currently happening? Do we just have to rely on what the US says?

Mr. Lewis: Of course, we have to take all possible steps to make sure that our laws and policies are respected, and that should be the case especially in the context of our special relationship. Historically, we were obviously given assurances that turned out not to be true, and that is totally unacceptable, whether it was the United States that did that or any other country with which we had any kind of diplomatic relations, let alone a special relationship. All that I would say to the hon. Lady is that we have now had an assurance, and we have to respect it. The United States was certainly left in no doubt, as has been said, about the fact that the Foreign Secretary was not only embarrassed, but angry that a country with which we pride ourselves on having a special relationship had, on this occasion, undoubtedly misled the British Government.

To conclude, the difference between legal and moral responsibility is not a simple issue. As hon. Members have said, there is no doubt that we owe the Chagossians justice, fairness and respect for the fact that we treated the population badly all those years ago. Subsequently, we tried to offer redress through compensation and by resettling Chagossians in this country, and my hon. Friend the Member for Crawley has spoken of her experiences in her constituency. Equally, the Government are defending their position for good reason. In the context of our responsibility to do what we believe is in the national interest and our moral responsibility to the Chagossians, we must continually review whether we are getting the balance right. We have no choice at this stage but to defend our position in the courts, but we must remember that we are culpable for what happened historically. That moral responsibility will never go away, and we have to find ways, as my hon. Friend the Member for Islington, North said, of constantly recognising that, accepting our responsibility and being held to account.

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RBS (Small Business Lending)

10.56 am

Mr. Jim Hood (Lanark and Hamilton, East) (Lab): I would like to draw attention to the disgraceful treatment that my constituent Mr. Derek Carlyle has received from the now publicly funded and publicly owned Royal Bank of Scotland. I first met Mr. Carlyle in January last year, when he undertook to highlight difficulties that he had encountered over the previous months in his business arrangements and dealings with the bank. I was horrified then, and I remain horrified today, by the inexcusable and underhand tactics adopted against him, both personally and professionally.

Mr. Tom Clarke (Coatbridge, Chryston and Bellshill) (Lab): I congratulate my hon. Friend on obtaining such an important debate. I have been dealing with constituents facing similar problems. This week, I have been dealing with a small business man who simply cannot get access to lending to assist his trading. Given that the Government have supported the banks to ensure the recovery of the economy, is my hon. Friend not absolutely right to tell the banks that their behaviour is unacceptable?

Mr. Hood: I thank my right hon. Friend for his intervention and I agree wholeheartedly. As I report further to hon. Members, however, he will find out that my constituent's case is not about a guy who could not get the funding; he had been promised the funding, but it was then withdrawn.

In introducing the debate, I should say that Mr. Carlyle was an established customer of the bank and had enjoyed an excellent working relationship with it over the years. Development funding had been provided for projects that were successfully completed. In 2007, Mr. Carlyle had a solid track record, achieving an average profit margin of 30 per cent. on each project, and one project in East Kilbride was still progressing. That year, an opportunity arose to purchase and develop land in the grounds of the renowned Gleneagles hotel in Perthshire. As was his habit, Mr. Carlyle approached the bank with this new business venture, which would potentially realise substantial profit, benefiting the bank and himself.

In March 2007 Mr. Carlyle met someone from the bank's commercial centre to negotiate funding for the project in two parts-the purchase of the land and the building development of a £4 million house. It is pertinent to note that it was a condition of the sale of the land that the plots could not be resold, and were required to be developed by March 2011, failing which the land would return to the sellers. That is what they call a buy-back clause. Because of the buy-back clause Mr. Carlyle had impressed on the bank the fact that he could not accept funding for the purchase of the land if funding for the development would not also be made available.

The bank was very enthusiastic about the project, and agreed. On the strength of his past dealings with RBS, and being confident of its support, Mr. Carlyle undertook the purchase of the land, although the funding from the bank for the purchase-£845,000 and £560,000-was not released until August 2007. Initial building works commenced, with continued assurances from the
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bank that it would support the Gleneagles development project. Mr. Carlyle had initially used some of his own funds to get the project started, and had paid off some debts, as a result of that, from the sale of another property, while also repaying some funds to the bank.

On 12 August 2008, Mr. Carlyle and his solicitors were abruptly advised that the bank would not provide the development funding, and that it demanded repayment of the £1.45 million used to purchase the Gleneagles land by 10.30 the next day, or, it said, it would "destroy" Mr. Carlyle; and it advised him that he "should be clear about the chaos that would ensue".

David Simpson (Upper Bann) (DUP): I welcome you to the Chair, Mr. Howarth. The hon. Gentleman has outlined something that is an exact mirror image of what is happening in Northern Ireland, through RBS, to the Ulster Bank, where facilities that have been agreed are withdrawn at the last minute. That affects many vulnerable businesses and the people employed in those small businesses. Does the hon. Gentleman agree that what the banks say privately or publicly to the Government is not what is happening on the ground?

Mr. Hood: That is very much the case. I thank the hon. Gentleman for making the same point that I hope to make to the House.

Mr. David Hamilton (Midlothian) (Lab): I know of examples in my constituency, as other hon. Members do in theirs, of companies, such as Crummock in Midlothian, that are beginning to be reluctant to discuss things, because of what the Royal Bank of Scotland has been doing. Those are long-established companies, which have had a long-term relationship with RBS, which has turned its back on them. My hon. Friend mentioned threats being made; could he give some examples?

Mr. Hood: Yes, I certainly will, as I develop my argument.

The reason given for the action was that there had been no agreement to provide the development funding, and that all the funds from the property that Mr. Carlyle had sold should have gone straight back to the bank; the bank was not happy about that. It claimed to have an agreement that the total funds from the sale should have gone back to the bank, but since then it has been unable to produce such an agreement.

The bank's solicitors then embarked on a series of actions that is shocking. In a short space of time Mr. Carlyle's bank accounts were frozen, his company forced into administration, his assets seized, and action to repossess his family home commenced, with arrestment and inhibition orders from the Court of Session in Edinburgh. Not satisfied with that, the bank manipulated a personal account used for school fees so that it became overdrawn, resulting in payment of Mr. Carlyle's children's school fees not being honoured. Furthermore, to make things more difficult for him, the bank prevented solicitors from acting on his behalf, and it was only with the bank's approval that his current solicitors in Edinburgh were able to be appointed.

The project in East Kilbride was also the subject of seizure and was sold by the bank at a considerable loss, of almost half its value. The unjustified attack resulted
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in the chaos and destruction that the bank had intended, destroying the man's business and causing horrendous damage to his personal life and reputation. The bank pressed on against Mr. Carlyle through the action it had raised in the Court of Session. Mr. Carlyle counterclaimed, on the basis that the promise from the bank to provide development funding was a contractual one, and that the bank was in breach of that contract, known as collateral warranty.

The Court of Session agreed with Mr. Carlyle. The judgment from Lord Glennie of 13 January 2010 found not only that the bank had failed to keep its contractual promise to provide the development funding, but that the conduct of the bank in the Court of Session fell far below the required standards. That is strong criticism from a judge. He also said that the Royal Bank of Scotland lacked "candour" in the proceedings, specifically in its deliberate failure to admit to key evidence in the Court of Session. If someone is described in a judge's language as lacking candour, that might mean to some of us in the House that they were lying through their back teeth.

Since the beginning of August 2008 the bank has bullied and intimidated Mr. Carlyle's usual solicitors, threatening them with destruction of their business practice, which resulted in their withdrawing from acting for him in this matter. That is the thing that I really want to point out to the House, and to the Government. Here were lawyers-and it is the case today-having to approve the person who was representing the person opposing them. The firm of solicitors whose business was threatened with ruin was a small one, with little option but to tell my constituent, "I'm sorry, I can't carry on representing you."

Dr. William McCrea (South Antrim) (DUP): The hon. Gentleman will know that the Government are a major stakeholder in the Royal Bank of Scotland. Why does he think it is possible for officials of the bank to snub their noses in the direction not just of many Members of Parliament, and even the Government, but also the Prime Minister's statements in this House? Surely that is totally unacceptable.

Mr. Hood: It is absolutely unacceptable, and I hope that my brief Adjournment debate will encourage other hon. Members to find out whether, as I suspect, there are many similar examples from their constituencies, and to bring those to the House.

Mr. Alistair Carmichael (Orkney and Shetland) (LD): The hon. Gentleman does not only his constituent but the whole House a service in bringing the matter before us, because it is one of the most extreme examples of something that I have heard of from my constituency experience; and I suspect that just about every other hon. Member who interacts with businesses in their community will be in the same situation.

Does the hon. Gentleman agree that what has been happening is made possible as the result of a policy of RBS in particular, of removing all decision making from the local branch, the point of contact that their customers-including me-have always enjoyed, and giving it to decision makers further down the line, who can come up with reasons for refusals that hold no water?

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Mr. George Howarth (in the Chair): Order. I remind hon. Members that this is a short debate and that interventions should anyway be brief and to the point. Long interventions prevent other hon. Members from having the opportunity to speak.

Mr. Hood: I thank you for your guidance, Mr. Howarth.

One thing has really irked me. Another of Mr. Carlyle's solicitors threatened by the bank found out that a letter concerning an alleged attempt to obtain substantial funds from RBS had been "concocted" by RBS staff. The solicitor threatened to report the incident to the police and the fraud office. Only then was the matter dropped. Sinister stuff.

The bank then pressed another large firm of solicitors to stop acting for Mr. Carlyle. I know which firm it was, but it would not be fair to name it at this stage; we may have to name it later, but we do not want to do so now. Mr. Carlyle was advised that no sizeable firm would act for him in a case against RBS. His current solicitors took the case only after saying to RBS, "Is it okay if we take the case?" They had to be approved by RBS before they could act. What sort of situation are we in?

The bank's specialised lending services and recoveries department in Edinburgh delivered a one-sided report to Mr. Dickinson, the chief executive, in order for him to respond to a letter from me. Again, it was lack of candour to brief the chief executive, but I leave that to him.

In the spring of 2009, the bank falsely advised the Court of Session, the bank's chief executive and Mr. Carlyle's solicitors that the latter's key witness, an RBS manager at the time, had changed her statement made in support of Mr. Carlyle's claim, and that there was no point in going to court. That, too, was found to be completely false. Indeed, the woman in question-I have a copy of her statement with me-never made such a retraction. That was proved to be the case in evidence given to the Court of Session. That is what made Lord Glennie refer to a "lack of candour".

Following the proof being given to the Court of Session in October 2009, and while awaiting judgment, the bank apparently conspired to influence a third party and its representatives to have Mr. Carlyle sequestrated for the small sum of £4,000, a sum unconnected with the bank. That was wrong and unfair; it was an attempt to destroy his ability to claim justice and reparation if he succeeded in his Court of Session counterclaim.

Despite admitting in court that the promise was breached, RBS has apparently decided to bring in another highly paid legal team that includes-get ready for this-the Dean of Faculty to represent it at the taxpayers' expense, in order to examine Lord Glennie's judgment.

The inexcusable and underhand tactics of bullying and intimidation by RBS personnel of individuals and organisations, no matter whether it is done in an uncontrolled manner or with the full knowledge and authority of the RBS directors, is wholly unacceptable. Once again, RBS personnel seem to believe that they are above the law and not accountable for their actions, and that the institution, with its bottomless pit of taxpayers' funds, will bail them out. They had the power to bully and destroy-and to hide when caught.

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Bob Spink (Castle Point) (Ind): The hon. Gentleman speaks of bullying smaller people and firms. May I tell the House about a firm in my constituency that had an order book of £3 million? It was owed £400,000, much of it by main contractors who were improperly withholding the money, and it owed others the lesser sum of £300,000. The banks forced that company into administration, and refused to lend to it. The banks and the main contractors cleaned up big time, and the small man was trodden all over. It is about time that the Government took action to stop such improper practices.

Mr. Hood: I am sure that the Minister is taking on board these interventions.

As regards Mr. Carlyle, I would urge RBS-via Mr. Dickinson, its chief executive-to follow up its admission in the Court of Session that it breached its promise and honour it by providing the reparation due to Mr. Carlyle for its wrongful actions once his damages claim has been quantified. The taxpayer should not be funding personal vendettas by bank personnel; nor should RBS be allowed to wriggle out of honouring the clear promise made to Mr. Carlyle.

On a wider note, I am sure that there are many without Mr. Carlyle's determination and strength of character who have been mistreated, bullied and intimidated by RBS. I urge them to lodge a detailed formal complaint to not only the Financial Ombudsman Service but their local MP.

I received a letter from RBS yesterday. I understand that the Minister has a copy. It was one of those "pp" letters that we see far too often; although I know where it came from, I do not know who wrote it. It contains the same stuff-I was going to say "garbage" but I do not want to be too disrespectful-but it has the same garbage that the bank presented in its case at the Court of Session, which Lord Glennie said was "less than candid". I shall disregard much of the letter's contents, as it contains information that we already know. However, it also includes an invite to a meeting at my constituency office to discuss this and other cases; I look forward to that.

I ask the Minister to take all this information away. I do not say that he or the Government are responsible. When I came to this debate, I hoped that we were dealing with rogue managers and rogue directors at RBS, but from the interventions that I have taken-they were from Members from Northern Ireland and from many other parts of the country-I suspect that it is even more serious. It is not rogue people: it may be institutionalised. If so, it must be sorted; and we, as major shareholders in RBS, have a duty to sort it.

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